DoD News

News Article

Pharmacy Changes Will Expand Services, Increase Safety

WASHINGTON, April 17, 2000  DoD healthcare experts are planning several ways to improve and expand pharmacy services for active and retired service members and their families.

A step that should appease some retiree groups is a pilot program to provide a pharmacy benefit to Medicare-enrolled military retirees and their families.

The pilot program will open up for enrollment June 1 in two randomly selected sites, Fleming, Ky., and Okeechobee, Fla., and could affect up to 6,000 individuals. Service will begin July 1, said Navy Capt. Charlie Hostettler, deputy director for pharmacy programs in the Office of the Assistant Secretary of Defense for Health Affairs.

The Pharmacy Redesign Pilot will make the National Mail Order Pharmacy program available and provide a retail pharmacy benefit to over-65 retirees in those two areas. It will entail a $200 annual enrollment fee and set cost shares, Hostettler said. Cost shares are $8 for each 90-day prescription through the mail order pharmacy and 20 percent cost share for each 30-day prescription through a retail outlet. Enrollees must also have Medicare Part B coverage to be eligible for this program.

Hostettler said program progress reports are due to Congress in October 2000 and in April and October 2001. Congress would decide whether to expand the program to retirees nationwide.

The pilot program, initially supposed to be up and running in October 1999, was delayed in order to lower the enrollment fee to $200 from a proposed $250. "In order to try to appeal to a larger group, we lowered the fee," said Mary Gerwin, deputy assistant secretary of defense for health affairs.

Hostettler called the program "an extremely robust benefit" for over-65 retirees featuring a low enrollment fee and low cost share. It's much better than civilian plans currently being proposed for Medicare recipients, he asserted, pointing to a recent Clinton administration plan that proposed a 50 percent cost share for prescriptions and a $1,000 annual cap.

Military retirees over 65 today have no pharmacy benefits unless they go to a military medical treatment facility, he said.

Plan beneficiaries will be encouraged to order their prescriptions by mail as much as possible because both they and the government save money, Gerwin said. "We get better prices, because we get better volume discounts," she said.

The fiscal 2000 Defense Authorization Act called for the Pharmacy Data Transaction System to be operational by April 15, and officials say they're close to that goal. A test site at Wright-Patterson Air Force Base, Ohio, should be up and running in April, Hostettler said, and officials hope to expand it system-wide by December 2000.

The Pharmacy Data Transaction System will be a DoD-wide consolidated database that stores all information relating to drug safety for each individual. If all goes as planned, Hostettler said, a "computerized red flag" will alert pharmacists when there might be problems with filling a prescription, such as patient allergies and potential drug interactions.

The fiscal 2000 budget also called for a uniform formulary across the DoD healthcare system by Oct. 1. A formulary is the drugs kept on hand. Hostettler said DoD may not meet that deadline. The problem, he said, is that the authorization act called for a Pharmacy and Therapeutics Committee to recommend the formulary and a Beneficiary Advisory Panel to review and comment on the decisions prior to their implementation.

Impaneling and convening committees takes time, he said: "We're trying our best to meet that Oct. 1 deadline," he added.

In addition to these planned improvements to the pharmacy benefit, DoD health officials have ambitious plans for a complete overhaul in the future.

Hostettler said the biggest hurdle for managers today is the several pharmacy systems in place under the umbrella of DoD pharmacy services.

"Today, we have five managed care contractors that take care of the 12 TRICARE regions," he said. "Each has its own pharmacy benefit management. Each has a retail pharmacy network set up, and they have firewalls set up between them. They are proprietary businesses and don't share proprietary information."

He also said the National Mail Order Pharmacy is a completely separate system, and 120 different systems manage the more than 500 military medical treatment facility pharmacies.

"It's difficult for mobile military patients to take a prescription from one area and get it filled in another area," Hostettler said. He said beneficiaries in this situation must sometimes pay out of pocket and file reimbursement claims, a time-consuming and often inefficient process.

"You end up having to work around the system, instead of the system working for you," he said.

DoD proposes to consolidate the contractor, mail order and military treatment facility systems, Gerwin said. In February, health affairs officials requested feedback and suggestions on the idea from government officials and experts in the pharmaceutical industry. Hostettler said responses were constructive and are being assimilated now.

He said the next step is to staff a plan and send it to Health Affairs officials for approval. Hostettler said implementation could be slow because of the complexity of TRICARE contracts. But, he and Gerwin insisted, the idea has merit for many reasons, with portability and cost savings topping the list.

"On the management side, we have five contractors, a national mail order system and all the medical treatment facilities operating somewhat independently. [Under the proposed consolidated system,] we would end up with one claims processor for all the pharmacy claims," Hostettler said. "Think about the overhead it takes to run five pharmacy management operations. We'd conserve a lot of hours and dollars."

He also said putting 8.4 million beneficiaries under one plan would give DoD bargaining power to get better prices from drug manufacturers. "This is particularly relevant when you have two popular brand-name drugs that do the same thing and the companies are actively competing for customers," Gerwin said.

Hostettler said the objective is straightforward: a uniform, consistent and equitable pharmacy benefit. "We want to optimize our resources as much as we can and maintain quality," he said. "We all win when we conserve dollars. The more efficient a plan is, the more the plan can do for beneficiaries."